Cloud providers love to extol the green virtues of cloud computing. And while the average CIO can likely retain some energy savings by locating their data services with a cloud service provider, just how green are most data centers?

Cloud computing? Steam from Icelandic geothermal power plant offers carbon neutral power for data centers -- for pennies on the dollar (photo by Wendy Schuchart)

The environmental activist group Greenpeace targeted big cloud providers like Google, Facebook, Yahoo! and Salesforce last year with accusations that cloud data centers are not as green as vendors would like CIOs to believe. In the U.S., legislation makes it illegal to purchase energy directly from sustainable energy sources like wind farms and solar energy sites. Companies like Google and Yahoo! get around that technicality by investing in sustainable energy sources and using the carbon offsets to negate the energy they buy from the grid (which could be from a variety of sources).

That’s great if you’re a gigantic enterprise but the average CIO doesn’t have the buying power to chase those feel-good green branding opportunities. Green technologies are nice to have but if they don’t feed the bottom line, fuggedaboutit.
One solution? Find a grid that’s already 100% sustainable while also being – in a word -- cheap.

In Iceland, two data centers are capitalizing upon the country’s 100% renewable energy grid, as well as a climate that offers free data center cooling 365 days of the year.

Last month, I toured Verne Global, one of the two data centers currently in operation on the volcanic island. The benefit for its customers comes not from the tree-hugging but from the low cost. Because the area is rich with geothermal resources, the grid is powered by 70% hydroelectric and 30% geothermal energy. These energy sources are considered completely carbon-neutral and result in a zero carbon footprint for companies taking advantage of Icelandic data center space.

This clean and green resource pays big on the bottom line -- Iceland’s energy costs run about 30%-50% of the typical electrical bill in the U.S and less than a quarter of the electrical bill in a larger European metropolis like London.

What’s more, since Verne Global is such a large consumer of power, it was able to negotiate a 20 year price freeze with the state-owned utility Landsirkjun -- a benefit the company is able to pass along to CIOs.

Some Verne Global clients include RMS, a catastrophic risk modeling firm; GreenQloud, an Icelandic cloud computing provider; and the Jersey City, N.J.-based Datapipe, an IT services firm supporting the financial and technology industry.

“Most people are conditioned almost to think ‘I’ve got to pay to be green. I’ve got to buy credits. If I’m going to Whole Foods, I’m going to buy more for this product.’ For a lot of companies, it’s a challenging thing to do in this industry,” said Jeff Monroe, Verne Global’s Chief Executive Officer in an interview at the Big Data Iceland event last month. “It’s just more expensive. People have that mentality that ‘This is what everyone does.’ Data centers are no different. People look around and say ‘People have been doing it this way for years and the earth hasn’t melted, so I’m just going to keep doing it this way’.”

The location of the Advania data center in nearby Reykjavik was also chosen for the low energy cost and the green advantages the island country had over nearby Sweden, which also offers natural free cooling. But while European and U.S. companies are quick to cite green benefits, we suspect it has more to do with another kind of green – the almighty dollar (or Euro, in some cases).

“We do see more companies coming in that are very excited about the green [benefits] but I can tell you conclusively if we did not offer a price equalization or price benefit, they wouldn’t do it,” said Monroe.

Action Item: Iceland is going to be the hottest location for data centers in the next five years, thanks to natural free cooling and rock bottom electrical prices. CIOs would be wise to model an Icelandic data center solution and see how the savings add up quickly.

Comments on 'Green data centers without buying carbon offsets'

Thanks Wendy - I vacationed in Iceland last year and the energy story there is so interesting. The affluence from their power plant is a world famous spa (the Blue Lagoon) while most power plants have challenges with environmental impact.